April 2, 2025, dubbed “Liberation Day” by US President Donald Trump, is drawing global attention from investors and economists.
On this day, the US plans to announce “reciprocal tariffs” on other nations. Trump describes this move as a turning point to protect the US economy. However, many experts warn of potential financial market turbulence and significant economic consequences.
“Liberation Day” Could Be the Year’s Most Important Event
According to Bloomberg, Trump is preparing to unveil these tariffs on April 2, targeting countries that impose trade barriers on the US.
Alex Krüger, a well-known economic analyst, emphasized that “Liberation Day” could be the most critical event of the year. He believes its impact could be ten times greater than any Federal Reserve meeting.
“April 2nd is similar to election night. It is the biggest event of the year by an order of magnitude. 10x more important than any FOMC, which is a lot. And anything can happen,”Alex Krüger predicted.
Krüger predicts that the market’s reaction will depend on Trump’s approach. If Trump takes a softer stance, the market could rally sharply. However, if he enforces broad tariffs, the market might crash by 10% to 15% in a short period.
He also warns that in a worst-case scenario, a financial “storm” could hit by mid-April, coinciding with US Tax Day, worsening negative market sentiment.
The Washington Post highlights that uncertainty around “Liberation Day” is causing global concern. Many countries are already making efforts to appease Trump. For instance, Mexican President Claudia Sheinbaum has cooperated with the US on immigration and drug crime control, temporarily easing tariff pressures.
However, experts believe these measures are only short-term fixes. They argue that they won’t fully prevent the risks posed by Trump’s tariff policies.
“The last two months have already hurt American businesses and consumers, but the April 2 deadline seriously could make all of that look like a tempest in a teapot. We don’t know exactly what they’re going to do, but from what they’re saying, it sounds functionally like new tariffs on all US imports.” – Joseph Politano, economic policy analyst at Apricitas Economics, said.
In early February, Trump announced a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese goods. The crypto market reacted immediately. The total crypto market cap dropped by 8% in a single day. Bitcoin fell from around $105,000 to nearly $92,000.
On March 11, Trump introduced new tariffs on Canada, further worsening the market downturn. Since early February, the S&P 500 has declined 7%, and the NASDAQ has fallen 10%, driven by inflation and recession fears.
As a result, the upcoming “Liberation Day” could trigger extreme volatility and massive liquidations for crypto traders.
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